Lack of listings dents NZX profit

NZX has reported a 32 per cent drop in full year profit as higher staff costs and expenses, coupled with a dearth of new listings, dragged on otherwise modest growth.

The securities market operator's net profit for the 12 months to the end of December fell to $9.9 million from $14.5m in the previous year.

Revenue rose 2.4 per cent to $56m, with a lack of new listing on the share market, outside of Fonterra and Moa, holding growth in check.

The operating earnings figure met Forsyth Barr's forecasts, but missed a bottom line estimate, with the brokerage expecting NZX's net profit to come in at a similar level to the previous year.

NZX chief executive Tim Bennett said lower earnings were largely due to a 14 per cent increase in operating expenses over the year to $34m. That was widened by a $700,000 adjustment to intangible assets, $1.5m of foreign exchange losses, and $1m in one-off revenues and expense accruals.

"A number of one-off factors influenced this year's result, which was set against a background of very low levels of capital raising by historic standards," he said.

Still, the listing of the Fonterra Shareholders Fund, and major sell-downs by institutional shareholders over the year, saw trading volumes increase 22 per cent compared to last year.

The firm said while it expects to see moderate growth from its agricultural, securities information, annual listing and market operations revenue stream, profit will be determined by the number of primary and secondary capital raisings in the year.

"2013 has some exciting possibilities for the development of New Zealand's capital markets and for the continued evolution of NZX," Bennett said. "We are working hard to capture these opportunities for the benefit of our shareholders and New Zealand."

A dividend of 1.25 cents per share was declared, in line with NZX's policy of increases shareholder payments by 1c per year, and is payable on March 22.

NZX shares have yet to trade today but closed at $1.30 each on Friday.